One of the most commonly leased types of vehicles is the motor vehicle and, in particular, consumer motor vehicles. Leasing a motor vehicle can involve a significantly lower monthly payment as compared to financing the purchase of the same motor vehicle. Nevertheless, most automotive leases typically require significant cash payments at the time the lease is signed.
Insurance coverage for purchased vehicles may cover the value of the vehicles at the time of total loss or may cover the cost of replacement. Insurance coverage for leased items, typically covers the replacement value of the leased item to the owner and the lessee is relieved of further lease obligations. This can be insufficient for the lessee to replace a leased vehicle because of significant out of pocket expenses incurred when a lease is first signed.